US bank before offensive
JP Morgan wants to stir up the German market
By Jannik Tillar
07/25/2023 1:39 p.m
JP Morgan Chase has ambitious plans in Europe. After starting out in Great Britain, the American banking giant is now targeting the German market.
The largest US bank JP Morgan Chase wants to attack the market for German private customers. Corresponding reports confirmed JP Morgan CEO Jamie Dimon in an interview with the “Handelsblatt”. What is known about the plans and what else you need to know about JP Morgan: five questions and answers.
Who is JP Morgan Chase?
JP Morgan Chase is the largest bank in the US and the fifth largest financial institution in the world – the other four banks in the top five are all from China. With total assets of $3.6 trillion and quarterly earnings of $14.5 billion, JP Morgan is one of the most successful companies in the world. According to the business magazine “Forbes”, JP Morgan is currently the largest company in the world – weighted according to the four categories of sales, profit, assets and market value. JP Morgan has been led by CEO Jamie Dimon since 2005. During this time, sales more than doubled from $79 billion to $154 billion.
In which fields is JP Morgan active?
Unlike most of its competitors, JP Morgan has focused less on individual business areas. In principle, the bank wants to be the market leader in all areas, and it already is in many areas in the USA – for example in investment banking, private equity and lending. For its size and potential inertia, profitability is impressive: JP Morgan has the highest net margin among the largest US banks, even if it has fallen from 30 percent since the end of 2020 to 21 percent most recently in the second quarter. Without the acquisition of First Republic Bank in April, however, it would have been 25 percent. The return on equity is correspondingly high, leading the industry at 13.8 percent.
How is JP Morgan doing in Europe?
The attack on the European market has only just started. In Great Britain, the company is already extremely successful with its online bank Chase and gained a million customers in the first year – for example with a cashback program and an interest rate offer. After Brexit, JP Morgan relocated its EU activities to Frankfurt. Most recently, the European subsidiary’s total assets have risen to EUR 436 billion, making it the fifth-largest bank in Germany. So far, the bank has mainly generated sales with companies and wealthy private customers in this country. But according to Dimon, the online bank Chase is also to start in Germany and compete with neobanks such as N26 or Revolut. The bank is thus aiming for a broader customer base. In perspective, JP Morgan wants to be among the top three in Germany.
What is known about the plans?
JP Morgan wants to come to the Federal Republic with its digital private customer program Chase, that is well known. In addition, many details are still open. It is clear that Chase will initially only start with a few functions and will be expanded step by step. JP Morgan did the same thing in the UK. For example, a trading offer or construction loans have already been announced for the British offer.
Interestingly, JP Morgan is not developing the Germany offer in the banking metropolis of Frankfurt, but in Berlin. In a Friedrichshain coworking space, a high double-digit number of employees are currently working on the launch, which is likely to follow in late 2024 or early 2025. In the Finance Forward Podcast Germany boss Stefan Povaly had already stated that Great Britain served as a model for this.
Who is part of the management staff?
The top staff includes above all deserving employees who have already contributed to the successful launch in Great Britain, such as the managers Krzysztof Dlugozima and Max Kellner. Both moved from London to Berlin in spring 2022 and are Copernicus alumni – so they worked on Commerzbank’s discontinued Copernicus digital bank project. Basically, according to the “financial scene”, JP Morgan relies on experienced end customer experts in top management, such as the former Targobank product director Rames Askar or Claudia Baghoorn, who most recently developed the robo-advisor offer at Fidelity. In the levels below, JP Morgan should also aggressively poach the competition, according to industry circles. According to “Finance Forward”, this has already been achieved with N26 and Bitpanda. At the same time, JP Morgan is benefiting from the fact that fintechs are increasingly shedding staff. Among the employees there are also ex-employees of the insolvent neobank Nuri.